One livelihood, so many hats to wear! Small business owners often find themselves stretched to the limit of their time, energy, and, most of all, their natural talents.
You can’t do everything, but sometimes, you have to try. And when it comes to payroll, it’s a task that needs to get done! Consider that, on average, it takes a small business owner five hours per pay period to complete payroll amounts.
Not an insignificant amount of time, but it may be worth it, at least in the short term. So you want to know how to do payroll yourself? Here are the most important things to remember.
Employer Identification Number
The first thing you need to do is make sure the IRS knows who you and your employees are. As an employer, you need to file for an EIN, or employee identification number. It’s akin to a social security number for your business, and it helps the feds distinguish your business as a tax-paying entity.
W4 or W9?
The next piece of the payroll puzzle is to clarify whether your workers are considered employees or independent contractors. If your workers are employees, they’ll need to fill out a W4. If they’re independent contractors, it’s a W-9 all day.
Payment Schedule
Plan out your payment schedule. The three most important dates for a payroll manager are:
- Employee pay dates
- Tax payment due dates
- Tax filing deadlines
Once you’re clear on the critical due dates, make sure you have sufficient funds to pay on time.
Paying Taxes
To have enough to cover payroll tax, you must withhold the correct amount come payroll time. Use an IRS Withholding Calculator or a paycheck calculator particular to your state’s tax laws.
Make sure you’re paying the correct local, state, and federal taxes based on the correct schedule, and don’t be late!
If you want to make sure you’re keeping good records, consider making pay stubs. Here is more info on the best online pay stub service.
Filing Tax Forms
File your quarterly tax returns and come tax time, prepare your employees’ W2s, as well as the annual tax filings for your business. Avoid late fees, as payroll late fees can be the bain of small businesses.
Payroll Services
Luckily, there are enough bootstrappers out there that the market sees the need for affordable, easy, online payroll services and has answered in kind. There are a slew of software platforms to choose from.
From old hands like Intuit to new schoolers like Gusto to the exceedingly user-friendly Square Payroll, here is a list of the top online payroll services. You can accomplish all of the vital tasks of payroll easily and reliably.
If You Want to Know How to Do Payroll Yourself
If you do your homework, stay diligent about the proper forms and dates, and don’t skip payments, it’s entirely possible to learn how to do payroll for your small business.
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